Upward trend continues in US domestic HDG market

Spot prices in the US domestic hot dipped galvanized (HDG) market are up $0.50 cwt. ($11/mt or $10/nt) since our last report a week ago, bringing the total value of increases for coated products up to $3.00 cwt. ($66/mt or $60/nt) in just two weeks time.

And with a significant increase expected on busheling prices next month, the question on everybody's mind is how long this uptrend will last. But, with delivery dates approximately 6-to-12 weeks on coated products, and a number of mills already closing January order books, and no longer offering February deliveries, mills should be able to successfully enforce their increases through Q1. "There were $150/nt worth of increase announcements on the heels of the last $40-$50/lt scrap increase; I'm nervous about what the next scrap announcement could do" commented one Southeast distributor to SteelOrbis. Such sentiment is widespread among market players, forcing most to agree that the time for placing orders is still now, even though the last two weeks of the year are usually reserved for complacency.

Furthermore, the hope amongst both buyers and sellers alike, however, is that by March of next year some uptick in demand from the construction industry will allow mills to keep prices from slipping significantly, and make distributors more willing to pay the higher prices.

Current US domestic spot prices for HDG and Galvalume base products are now $38.00-$40.00 cwt. ($838-$882/mt or $760-$800/nt)ex-Midwest mill, while the price of coating extras is about $49.00-$51.00 cwt. ($1,080-$1,124/mt or $980-$1,020/nt), with few offers still available at the lowest end of the range, and no reports of deals being made below $49.00 cwt.

The market for coated products in the US is changing almost daily, and offers that were valid at the beginning of the week, are void by week's end. The same goes for import offers. After competitive Asian offers poured in the latter days of the week ending December 17, traders report that many were no longer available by the middle of last week. Offers of Galvalume coil from Korea, China, and Taiwan reported last week are no longer valid, and sources indicate that Taiwanese mills have already closed their order books for February production.